UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 
 
 FORM
10-Q / A
 Amendment
No. 1
  
 
 (Mark
One)
 
 x QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the
quarterly period ended June 30, 2010
 
  ̈ TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
 For the
transition period from __________ to ___________
 
 Commission
file number : 000-53268
 
 CHINA
WI-MAX COMMUNICATIONS, INC.
 
 (Exact
name of registrant as specified in its charter)
 
 Nevada
                  
                  61-1504884(State
      of Incorporation)
                  
                  (IRS
      Employer ID Number)
 
 1905
Sherman Street, Suite 335, Denver, Colorado 80203
 
 (Address
of principal executive offices)
 
 303-993-8028
 
 (Registrant's
Telephone number)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to the
filing  requirements for the past 90 days.
 Yes x   No
 ̈
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes  ̈     No
 ̈
 
 Indicate
by check mark whether the registrant is a large accelerated file, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
 
 Large
      accelerated filer  ̈
              
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈
              (Do
      not check if a smaller reporting company)
              Smaller
      reporting company x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈ No x
 
 Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
 
 As of
August 20, 2010 there were 19,545,115 shares of the registrant's common stock
issued and outstanding.
  EXPLANATORY
NOTE
 China
Wi-Max Communications, Inc. (the “Company”) is filing this Amendment No. 1 (the
“Amendment”) to its Quarterly Report on Form 10-Q for the quarter ended June 30,
2010, which was originally filed with the Securities and Exchange Commission
(the “Commission”) on August 23, 2010 (the “Original Filing”).
  The
purpose of this amendment is to add expanded disclosure to its notes to
unaudited interim financial statements as follows: (1) add a section to Note 1
entitled “Basis of Presentation” and (2) add expanded disclosure to Note 2in the
section entitled “Consolidation of Variable Interest Entity” regarding Gao Da.
In connection with the filing of this Amendment and pursuant to the rules of the
Commission, the Chief Executive Officer and the Chief Financial Officer of the
Company have reissued certain of their required certifications presented in
Exhibits 31.1 and 31.2.
  Except as
described above, no other changes have been made to the Original Filing. The
Original Filing continues to speak as of the dates described in the Original
Filing, and we have not updated the disclosures contained therein to reflect any
events that occurred subsequent to such dates. Accordingly, this Amendment
should be read in conjunction with the Company’s filings made with the
Commission subsequent to the filing of the Original Filing, as information in
such filings may update or supersede certain information contained in this
Amendment.


PagePART
      I - FINANCIAL INFORMATIONItem
      1.
                                            Financial
      StatementsBalance
      Sheets –June 30, 2010 (Unaudited) and December 31, 2009
                                            
                                            F-1Statements
      of Operations (Unaudited) - Three months and six months ended June 30,
      2010 and 2009 and the period From July 5, 2006 (Inception) to June 30,
      2010
                                            
                                            F-2
      – F-3Statements
      of Changes in Deficit (Unaudited) - From July 5, 2006 (Inception) to June
      30, 2010
                                            
                                            F-4Statements
      of Cash Flows (Unaudited) - Six months ended June 30, 2010 and 2009
      and From July 5, 2006 (Inception) to June 30, 2010
                                            
                                            F-5Notes
      to the Financial Statements (Unaudited)
                                            
                                            F-6Item
      2.
                                            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                            
                                            3Item
      3.
                                            Quantitative
      and Qualitative Disclosures About Market Risk - Not
    Applicable
                                            
                                            6Item
      4T.
                                            Controls
      and Procedures
                                            
                                            6PART
      II - OTHER INFORMATIONItem
      1.
                                            Legal
      Proceedings -Not Applicable
                                            
                                            6Item
      2.
                                            Unregistered
      Sales of Equity Securities and Use of Proceeds
                                            
                                            6Item
      3.
                                            Defaults
      Upon Senior Securities - Not Applicable
                                            
                                            8Item
      4.
                                            Submission
      of Matters to a Vote of Security Holders - Not Applicable
                                            
                                            8Item
      5.
                                            Other
      Information - Not Applicable
                                            
                                            8Item
      6.
                                            Exhibits
                                            
                                            8SIGNATURES
                                            
                                            9




2




CHINA WI-MAX COMMUNICATIONS, INC.
 (A
Development Stage Enterprise)
 
 CONSOLIDATED
BALANCE SHEETS
 
 June 30,
                    
                    
                    December 31,2010
                    
                    
                    2009(unaudited)ASSETSCurrent
      assets:Cash
                    
                    $
                    308
                    
                    
                    $
                    34,524Prepaid
      expenses
                    
                    
                    30,309
                    
                    
                    
                    52,385Total
      current assets
                    
                    
                    30,617
                    
                    
                    
                    86,909Property
      and equipment, net
                    
                    
                    502,997
                    
                    
                    
                    514,731Intangible
      assets
                    
                    
                    305,678
                    
                    
                    
                    305,678808,675
                    
                    
                    
                    820,409$
                    839,292
                    
                    
                    $
                    907,318LIABILITIES
      AND DEFICITCurrent
      liabilities:Accounts
      payable
                    
                    $
                    656,492
                    
                    
                    $
                    357,577Accrued
      interest
                    
                    
                    580,943
                    
                    
                    
                    425,189Notes
      payable
                    
                    
                    3,661,444
                    
                    
                    
                    3,468,824Total
      current liabilities
                    
                    
                    4,898,879
                    
                    
                    
                    4,251,590Deficit:China
      Wi-Max shareholders' deficit:Common
      stock; $.001 par value; 100,000,000 shares authorized; 17,892,063 and
      14,654,004shares
      issued and outstanding as of June 30, 2010 and December 31, 2009,
      respectively
                    
                    
                    17,892
                    
                    
                    
                    14,654Additional
      paid-in capital
                    
                    
                    3,559,174
                    
                    
                    
                    1,892,931Accumulated
      other comprehensive income
                    
                    
                    26,889
                    
                    
                    
                    25,978Deficit
      accumulated during the development stage
                    
                    
                    (7,643,686
                    )
                    
                    
                    (5,277,835
                    )Total
      China Wi-Max  shareholders' deficit
                    
                    
                    (4,039,731
                    )
                    
                    
                    (3,344,272
                    )Noncontrolling
      interest
                    
                    
                    (19,856
                    )
                    
                    
                    -Total
      deficit
                    
                    
                    (4,059,587
                    )
                    
                    
                    (3,344,272
                    )Total
      liabilities and deficit
                    
                    $
                    839,292
                    
                    
                    $
                    907,318
 
 See notes
to unaudited consolidated financial statements.
  F-1
  CHINA WI-MAX COMMUNICATIONS, INC.
 (A
Development Stage Enterprise)
 
 CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 
 (UNAUDITED)
 
 Three Months EndedJune 30,
                        
                        
                        June 30,2010
                        
                        
                        2009Operating
      expenses:General
      and administrative expense
                        
                        $
                        (432,991
                        )
                        
                        $
                        (843,257
                        )Operating
      loss
                        
                        
                        (432,991
                        )
                        
                        
                        (843,257
                        )Other
      expense:Interest
      expense
                        
                        
                        (165,085
                        )
                        
                        
                        (70,850
                        )Net
      loss
                        
                        
                        (598,076
                        )
                        
                        
                        (914,107
                        )Net
      loss attributable to the noncontrolling interest
                        
                        
                        4,265
                        
                        
                        
                        -Net
      loss attributable to China Wi-Max
                        
                        
                        (593,811
                        )
                        
                        
                        (914,107
                        )Foreign
      currency translation loss
                        
                        
                        (1,123
                        )
                        
                        
                        (532
                        )Comprehensive
      loss
                        
                        $
                        (599,199
                        )
                        
                        $
                        (914,639
                        )Basic
      and diluted net loss per share attribute to China Wi-Max common
      shareholders
                        
                        $
                        (0.04
                        )
                        
                        $
                        (0.07
                        )Weighted
      average number of common shares outstanding
                        
                        
                        16,373,938
                        
                        
                        
                        12,558,464
 
 See notes
to unaudited consolidated financial statements.
  F-2
  CHINA
WI-MAX COMMUNICATIONS, INC.
 (A
Development Stage Enterprise)
 
 CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 (UNAUDITED)
 
 Period fromJuly 5, 2006(inception)Six Months Ended
                        
                        
                        throughJune 30,
                        
                        
                        June 30,
                        
                        
                        June 30,2010
                        
                        
                        2009
                        
                        
                        2010Operating
      expenses:General
      and administrative expense
                        
                        $
                        (2,127,441
                        )
                        
                        $
                        (1,432,291
                        )
                        
                        $
                        (6,887,826
                        )Operating
      loss
                        
                        
                        (2,127,441
                        )
                        
                        
                        (1,432,291
                        )
                        
                        
                        (6,887,826
                        )Other
      expense:Interest
      expense
                        
                        
                        (258,266
                        )
                        
                        
                        (133,677
                        )
                        
                        
                        (775,716
                        )Net
      loss
                        
                        
                        (2,385,707
                        )
                        
                        
                        (1,565,968
                        )
                        
                        
                        (7,663,542
                        )Net
      loss attributable to the noncontrolling interest
                        
                        
                        19,856
                        
                        
                        
                        -
                        
                        
                        
                        19,856Net
      loss attributable to China Wi-Max
                        
                        
                        (2,365,851
                        )
                        
                        
                        (1,565,968
                        )
                        
                        
                        (7,683,398
                        )Foreign
      currency translation gain
                        
                        
                        911
                        
                        
                        
                        54
                        
                        
                        
                        26,889Comprehensive
      loss
                        
                        $
                        (2,384,796
                        )
                        
                        $
                        (1,565,914
                        )
                        
                        $
                        (7,636,653
                        )Basic
      and diluted net loss per share attribute to China Wi-Max common
      shareholders
                        
                        $
                        (0.15
                        )
                        
                        $
                        (0.13
                        )Weighted
      average number of common shares outstanding
                        
                        
                        15,601,408
                        
                        
                        
                        11,963,317
 
 See notes
to unaudited consolidated financial statements.
  F-3
  CHINA
WI-MAX COMMUNICATIONS, INC.
 (A
Development Stage Enterprise)
 
 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' DEFICIT
 
 PERIODS
FROM JULY 5, 2006 (INCEPTION) THROUGH JUNE 30, 2010
 
 China Wi-Max ShareholdersAccumulated
                        
                        
                        DeficitAdditional
                        
                        
                        other
                        
                        
                        accumulated
                        
                        
                        
                        
                        
                        TotalCommon stock
                        
                        
                        paid-in
                        
                        
                        comprehensive
                        
                        
                        during the
                        
                        
                        Noncontrolling
                        
                        
                        shareholders'Shares
                        
                        
                        Amount
                        
                        
                        capital
                        
                        
                        income
                        
                        
                        development stage
                        
                        
                        Interest
                        
                        
                        deficitCommon
      stock issued for cash between July 5, 2006 (inception)and
      December 31, 2006 at par value ($0.001 per share)
                        
                        
                        3,825,000
                        
                        
                        $
                        3,825
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        3,825Net
      loss
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (8,538
                        )
                        
                        
                        
                        
                        
                        
                        (8,538
                        )Balances,
      December 31, 2006
                        
                        
                        3,825,000
                        
                        
                        
                        3,825
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (8,538
                        )
                        
                        
                        -
                        
                        
                        
                        (4,713
                        )Common
      stock issued for cash between January andJune
      2007 at par value ($0.001 per share)
                        
                        
                        5,230,000
                        
                        
                        
                        5,230
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        5,230Common
      stock issued for cash between June andDecember
      2007 at par value ($0.001 per share)
                        
                        
                        260,000
                        
                        
                        
                        260
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        260Common
      stock issued for services, valued at $0.25 per share
                        
                        
                        455,000
                        
                        
                        
                        455
                        
                        
                        
                        113,295
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        113,750Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (444,590
                        )
                        
                        
                        -
                        
                        
                        
                        (444,590
                        )Balances,
      December 31, 2007
                        
                        
                        9,770,000
                        
                        
                        
                        9,770
                        
                        
                        
                        113,295
                        
                        
                        
                        -
                        
                        
                        
                        (453,128
                        )
                        
                        
                        -
                        
                        
                        
                        (330,063
                        )Shares
      of common stock cancelled at par value
                        
                        
                        (260,000
                        )
                        
                        
                        (260
                        )
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (260
                        )Common
      stock issued for services, valued at $0.25 per share
                        
                        
                        884,000
                        
                        
                        
                        884
                        
                        
                        
                        220,116
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        221,000Common
      stock issued upon conversion of notes and accrued interest in December
      2008, valued at $0.25 per share
                        
                        
                        391,002
                        
                        
                        
                        391
                        
                        
                        
                        97,362
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        97,753Fair
      value of options vested during the period
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        103,275
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        103,275Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (1,716,195
                        )
                        
                        
                        -
                        
                        
                        
                        (1,716,195
                        )Other
      comprehensive income adjustments, gain on foreign currency
      translation
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        25,853
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        25,853Balances,
      December 31, 2008
                        
                        
                        10,785,002
                        
                        
                        
                        10,785
                        
                        
                        
                        534,048
                        
                        
                        
                        25,853
                        
                        
                        
                        (2,169,323
                        )
                        
                        
                        -
                        
                        
                        
                        (1,598,637
                        )Common
      stock issued for services
                        
                        
                        1,900,000
                        
                        
                        
                        1,900
                        
                        
                        
                        473,100
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        475,000Common
      stock issued upon conversion of notes and accrued interest
                        
                        
                        1,969,002
                        
                        
                        
                        1,969
                        
                        
                        
                        549,422
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        551,391Fair
      value of options vesting during the period
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        336,361
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        336,361Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (3,108,512
                        )
                        
                        
                        -
                        
                        
                        
                        (3,108,512
                        )Other
      comprehensive income adjustments, gain on foreign currency
      translation
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        125
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        125Balances,
      December 31, 2009
                        
                        
                        14,654,004
                        
                        
                        
                        14,654
                        
                        
                        
                        1,892,931
                        
                        
                        
                        25,978
                        
                        
                        
                        (5,277,835
                        )
                        
                        
                        -
                        
                        
                        
                        (3,344,272
                        )Common
      stock issued for services
                        
                        
                        2,697,500
                        
                        
                        
                        2,697
                        
                        
                        
                        563,565
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        566,262Common
      stock issued upon conversion of notes and accrued interest
                        
                        
                        240,559
                        
                        
                        
                        241
                        
                        
                        
                        69,673
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        69,914Warrants/Shares
      issued related to convertible notes
                        
                        
                        300,000
                        
                        
                        
                        300
                        
                        
                        
                        108,178
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        108,478Fair
      value of options vesting during the period
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        924,827
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        924,827Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (2,365,851
                        )
                        
                        
                        (19,856
                        )
                        
                        
                        (2,385,707
                        )Other
      comprehensive income adjustments, gain on foreign currency
      translation
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        911
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        911Balances,
      June 30, 2010 (unaudited)
                        
                        
                        17,892,063
                        
                        
                        $
                        17,892
                        
                        
                        $
                        3,559,174
                        
                        
                        $
                        26,889
                        
                        
                        $
                        (7,643,686
                        )
                        
                        $
                        (19,856
                        )
                        
                        $
                        (4,059,587
                        )
 
 See notes
to unaudited consolidated financial statements.
  F-4
  CHINA WI-MAX COMMUNICATIONS,INC.
 (A
Development Stage Enterprise)
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 
 (UNAUDITED)
 
 Six Months Ended
                    
                    
                    Period from
                      July 5, 2006
                      (Inception)
                      throughJune 30, 2010
                    
                    
                    June 30, 2009
                    
                    
                    June 30, 2010Cash
      flows from operating activities:Net
      loss
                    
                    $
                    (2,385,707
                    )
                    
                    $
                    (1,565,968
                    )
                    
                    $
                    (7,663,542
                    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Common
      stock issued for services
                    
                    
                    566,262
                    
                    
                    
                    508,750
                    
                    
                    
                    1,376,012Non-cash
      stock option expense
                    
                    
                    924,827
                    
                    
                    
                    183,724
                    
                    
                    
                    1,364,463Common
      stock issued to note holders
                    
                    
                    42,000
                    
                    
                    
                    
                    
                    
                    
                    42,000Amortization
      of debt issue costs
                    
                    
                    34,498
                    
                    
                    
                    -
                    
                    
                    
                    34,498Depreciation
                    
                    
                    13,851
                    
                    
                    
                    18,565
                    
                    
                    
                    47,623Amortization
                    
                    
                    -
                    
                    
                    
                    12,227
                    
                    
                    
                    25,649Changes
      in assets and liabilities:Decrease
      (Increase) in prepaid expenses
                    
                    
                    22,076
                    
                    
                    
                    (15,105
                    )
                    
                    
                    (30,309
                    )Decrease
      in other assets
                    
                    
                    -
                    
                    
                    
                    20,400
                    
                    
                    
                    38,139Increase
      in accounts payable
                    
                    
                    298,915
                    
                    
                    
                    183,397
                    
                    
                    
                    656,491Increase
      in accrued interest
                    
                    
                    181,768
                    
                    
                    
                    133,742
                    
                    
                    
                    694,201Net
      cash used in operating activities
                    
                    
                    (301,510
                    )
                    
                    
                    (520,308
                    )
                    
                    
                    (3,414,775
                    )Cash
      flows from investing activities:Purchase
      of property and equipment
                    
                    
                    -
                    
                    
                    
                    (70,325
                    )
                    
                    
                    (521,329
                    )Purchase
      of intangible assets
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (364,195
                    )Net
      cash used in investing activities
                    
                    
                    -
                    
                    
                    
                    (70,325
                    )
                    
                    
                    (885,524
                    )Cash
      flows from financing activities:Proceeds
      from issuance of notes payable and warrants
                    
                    
                    268,500
                    
                    
                    
                    601,403
                    
                    
                    
                    4,299,224Proceeds
      from issuance of common stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    9,055Debt
      issue costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (5,270
                    )Net
      cash provided by financing activities
                    
                    
                    268,500
                    
                    
                    
                    601,403
                    
                    
                    
                    4,303,009Effect
      of exchange rate changes on cash
                    
                    
                    (1,206
                    )
                    
                    
                    -
                    
                    
                    
                    (2,401
                    )Net
      (decrease) increase in cash
                    
                    
                    (34,216
                    )
                    
                    
                    10,770
                    
                    
                    
                    309Cash,
      beginning of period
                    
                    
                    34,524
                    
                    
                    
                    147,889
                    
                    
                    
                    -Cash,
      end of period
                    
                    $
                    308
                    
                    
                    $
                    158,659
                    
                    
                    $
                    309Supplemental
      disclosure of non-cash investing and financing activities:Convertible
      notes and interest converted to common stock
                    
                    $
                    69,914
                    
                    
                    $
                    342,260
                    
                    
                    $
                    719,058
 
 See notes
to unaudited consolidated financial statement.
  F-5




CHINA
WI-MAX COMMUNICATIONS, INC.


(A
Development Stage Enterprise)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


SIX
MONTHS ENDED JUNE 30, 2010 AND 2009


(Unaudited)





1.       Organization, basis of presentation,
going concern and management's plans:





Organization
and basis of presentation:




China
Wi-Max Communications, Inc. (the "Company") is a development stage
telecommunications broadband provider. The Company is a Nevada corporation
formed in July 2006, and is focused on providing commercial customers with high
bandwidth connections throughout first and second tier markets in China. For
accounting purposes, the Company is classified as a development stage
enterprise.





The
Company plans to build, own, and operate metropolitan area Internet Protocol
(IP)-based broadband networks using a combination of Company-owned optical fiber
and licensed Wi-Max (Worldwide Interoperability for Microwave Access) capable
wireless spectrum.  These networks are designed to provide the
reliability, redundancy, scalability, and other features expected of a carrier
class network.  The Company intends to provide value-added services
such as IP transport, Internet Service Provider (ISP) services, and broadband
internet access.  The Company plans to position itself to bypass the
local loop facilities of the current local exchange carriers to connect
enterprise customers directly to a global communications network.








The
Company's financial statements as of June 30, 2010, the year ended December 31,
2009, and the periods from September 24, 2008 (the date at which the Company
gained 100% ownership of Da Chuan and Shi Dai) through June 30, 2010, include
the accounts of Da Chuan and Shi Dai.  Intercompany balances and
transactions have been eliminated in consolidation. In  connection
with the adoption of new accounting rules for variable interest entities
“VIE’s”, the Company began consolidating Beijing Gao Da Yang Guang Communication
Technology Ltd. (“Gao Da”) beginning on January 1, 2010. All intercompany
balances and transactions have been eliminated. The consolidation did not have a
material impact on the financial statements (Note 2).





The
Company's foreign subsidiaries (Da Chuan and Shi Dai) and its controlled
affiliate (Gao Da) are located in China, and foreign transactions are conducted
in currencies other than the U.S. dollar,  primarily the
Chinese  Renmimbi  (RMB). Da Chuan and Shi Dai financial
statements are maintained in the functional currency.  For financial
reporting purposes, the financial statements of the subsidiaries have been
translated into United States (U.S.) dollars.  Assets and liabilities
are translated into U.S. dollars at year-end exchange rates. Income and expense
items are translated at weighted-average rates of exchange prevailing during the
year.  Any resulting translation adjustments are charged or credited
to other comprehensive income in shareholders' deficit. Gains and losses on
foreign currency transactions are included in other income and
expense.


F-6





The
Company is exposed to movements in foreign currency exchange rates. In addition,
the Company is subject to risks including adverse developments in the foreign
political and economic environment, trade barriers, managing foreign operations
and potentially adverse tax consequences.  There can be no assurance
that any of these factors will not have a material negative impact on the
Company's financial condition or results of operations in the
future.




Basis
of Presentation:




The
accompanying interim, unaudited financial statements of the Company have been
prepared in accordance with the instructions to quarterly reports on Form 10-Q.
In the opinion of management, all adjustments necessary to present fairly the
financial position, results of operations and cash flows at June 30,
2010, and for all periods presented, have been made. Certain information and
footnote disclosures normally included in financial statements
prepared in conformity with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is therefore
suggested that these interim financial statements be read in conjunction with
the summary of significant accounting policies and notes to financial statements
included in the Company’s Annual Report on Form 10-K for the year ended December
31, 2009. The results of operations for the periods ended June 30, 2010, are not
necessarily an indication of operating results for the full year.




Going
concern and management's plans:





The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business.  The Company
reported a net loss of $2,385,707 for the six months ended June 30, 2010, and a
working  capital  deficiency
and  shareholders'  deficit of
$4,868,262  and  $4,039,731,  respectively,  at
June 30, 2010. The Company has a limited operating history and no current
revenue producing operations.  In addition,  the Company
does not have a revolving loan agreement with any financial
institution,  nor can the Company provide
any  assurance  it will be able to enter  into
any  such  agreement  in the future,  or
be able to raise  funds  through a
future  issuance  of debt or equity.  These
factors raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments relating
to the recoverability and classification of assets or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.




The
Company's continuance as a going concern is dependent on its future
profitability and on the on-going support of its shareholders and creditors. In
order to mitigate the going concern issues, the Company is continuing its
efforts to raise capital. The Company raised approximately $233,500 during the
six months ended June 30, 2010. In July 2010, the Company entered into
a financing agreement with a third party, in which, subject to various
conditions and restrictions, this party may purchase up to $10
million of the Company's common  stock. However, additional financing
may not be available in amounts or on terms acceptable to the Company or at all.
As a consequence, if the Company is unable to obtain any additional financing in
the near term, the Company will be required to delay its business plan
implementation, and/or the Company may be required to cease operations in order
to offset the lack of available funding, which would have a material adverse
impact on the Company.





2.       Summary
of significant accounting policies:





Use of
estimates in the preparation of financial statements:





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.


F-7


Property
and equipment:





Property
and equipment are stated at cost, and depreciation is provided by use of the
straight-line method over the estimated useful lives of the related assets.
Major improvements are capitalized, while expenditures for repairs and
maintenance are expensed when incurred.  Estimated useful lives of
property and equipment are as follows:





Fiber
      optic cable
              
              25 yearsNetwork
      support equipment
              
              5 years





Impairment
of long-lived assets:





Management
assesses the carrying values of long-lived assets for impairment when
circumstances indicate that such amounts may not be recoverable from future
operations.  Generally, assets to be held and used are considered
impaired if the sum of expected undiscounted future cash flows is less than the
carrying amount of the asset.  Management does not believe any
impairment has occurred as of June 30, 2010.  The accounting estimates
for the Company's long-lived assets require management to make significant
assumptions about fair value. Management's assumptions regarding fair value
require significant judgments about economic factors, industry factors and
technology considerations,   as well as about the Company's
business prospects.  Changes in these judgments may have a significant
effect on the estimated fair values of the Company's long-lived assets and could
result in an impairment charge that could have a material adverse effect on the
Company’s statements of position and results of operations.





Fair
value of financial instruments:





The fair
value of the Company's cash, accounts payable and convertible  notes
approximate  their carrying amounts due to the short maturities of
these instruments.




Consolidation
of variable interest entity:




In June
2009, the FASB issued new guidance that amended the existing criteria for
consolidating VIE’s.  The new consolidation criteria requires an ongoing
qualitative assessment of which entity has the power to direct matters that most
significantly impact the activities of a VIE and has the obligation to absorb
losses or benefits that could be potentially significant to the VIE.  This
new guidance was effective for the Company beginning January 1,
2010.




In
connection with the adoption of the new accounting rules for VIE’s, the Company
consolidated an affiliate company, Gao Da, beginning on January 1,
2010. The Company is the sole variable interest holder of Gao Da, and it is
the primary beneficiary, as there is a service agreement between the Company and
Gao Da, in which the Company has agreed to fund all of Gao Da’s operations. Gao
Da is a development stage, PRC enterprise, with no revenue-producing
operations; at June 30, 2010, Gao Da's assets consist of license
rights with a carrying value of approximately $306,000 (Note 4) and liabilities
of approximately $ 424,000, which are due to China Wi-Max.  These
account balances eliminate in consolidation. Gao Da's license rights
cannot be sold or transferred without the prior approval of
the licensor.




Prior to
January 1, 2010, advances made by the Company to Gao Da for operations were
expensed by the Company. In addition, prior to January 1, 2010, the Company had
recorded contractual license rights, which represented the amount the Company
paid to Gao Da to purchase the frequency licenses held by Gao Da. The carrying
value of the contractual license rights was approximately the same amount as the
carrying value of the frequency licenses recorded by Gao Da through December 31,
2009. Therefore, upon consolidation of Gao Da on January 1, 2010, after
elimination of intercompany account balances and transactions, there was no
material impact on the Company’s consolidated financial statements.




Revenue
recognition:





As of
June 30, 2010, the Company has no revenue-producing operations. When revenue
generating operations begin, the Company will recognize revenue pursuant to
Securities and Exchange Commission, Staff Accounting Bulletin ("SAB") No. 101,
Revenue Recognition in Financial Statements, as amended by SAB No. 104, Revenue
Recognition. Consistent with the requirements of these SABs, revenue will be
recognized only when: a) persuasive evidence of arrangement exists, b) delivery
has occurred, c) the seller's price to the buyer is fixed, and d) collectability
is reasonably assured.


F-8


Loss per
share:





Basic
loss per share of common stock is computed based on the weighted average number
of common shares outstanding during the year. Stock options and common shares
issuable upon the conversion of debt securities (15,934,016 at June 30, 2010 and
11,967,890 at June 30, 2009) are not considered in the calculation, as the
effect would be antidilutive. Therefore, diluted loss per share is equivalent to
basic loss per share.





3.       Property
and equipment:





As of
June 30, 2010 and December 31, 2009, property and equipment consists of the
following:





June 30, 2010
                      
                      
                      December 31, 2009Fiber
      optic cable
                      
                      $
                      510,009
                      
                      
                      $
                      507,875Network
      equipment
                      
                      
                      40,797
                      
                      
                      
                      40,643550,806
                      
                      
                      
                      548,518Less
      accumulated depreciation
                      
                      
                      (47,809
                      )
                      
                      
                      (33,787
                      )$
                      502,997
                      
                      
                      $
                      514,731





4.       Intangible
assets:





As of
June 30, 2010 and December 31, 2009, intangible assets consist of contractual
license rights in the amount of 305,678.





Prior to
January 1, 2010, the Company's intangible asset, contractual license rights,
represented the Company’s rights to certain frequency licenses held by Gao Da.
The contractual license rights represented the right to revenue generated from
customers who contract to utilize frequency licenses held by Gao Da (Note 8).
Prior to January 1, 2010, the Company amortized this intangible asset over the
twenty-year term of the agreement. With the consolidation of Gao Da effective
January 1, 2010, the Company has recorded the underlying frequency
licenses held by Gao Da and has eliminated the contractual license
rights in consolidation. The Company does not Amortize these license
rights. The Company evaluates this intangible asset for impairment annually, and
between annual evaluations if events or changes in circumstances indicate that
the carrying amount of the asset may not be fully recoverable. In cases where
required, an impairment provision is recognized in an amount by which the
carrying value exceeds the estimated fair value of the asset.





The value
of the frequency licenses held by Gao Da is dependent on numerous factors,
including successful deployment of networks and connectivity, and/or radio
links. The Company considers the licenses to have an indefinite useful life
under the provisions of ASC Topic 350, Goodwill and Other Intangible
Assets. These licenses are typically renewed if the licensee files a
renewal application prior to license expiration wherein the licensee
demonstrates its engagement in supplying services or related activities to
satisfy the appropriate criteria for renewal. The Company is in the process
of obtaining a formal renewal for one of Gao Da's licenses from the local
authorities. Management has no reason to believe it will not receive such
formal renewal.




If at any
time the Company determines that these criteria will most likely not be met, or
if there is a change in management's future business plans or disposition of one
or more licenses underlying the contractual license rights, the Company will
first test the contractual license rights for impairment, and then the Company
will modify the life of the contractual license rights and begin amortizing the
cost over the remaining underlying license period. The Company also tests its
contractual license rights for impairment if there are any legal, regulatory,
contractual, competitive, and economic or other factors that are determined to
limit the useful lives of the licenses.


F-9





5.       Notes
payable:





Convertible
notes payable





As of
June 30, 2010, all of the 12 % convertible notes totaling $518,500 and 10%
convertible Notes totaling $1807,445 are due on demand.





10% notes
totaling $1,332,479 are due on December 31, 2010.





The
Company has negotiated with holders of Notes due at June 30, 2010 to convert
such notes and related accrued interest into shares of the Company's
common stock $.19 per share.





During
the six months ended June 30, 2010, the Company issued $233,500 of 10%
convertible notes payable. These notes bear interest at 10% per annum and are
unsecured. Principal and interest are convertible at any time into shares of the
Company's common stock at $0.50 per share at the option of the note holders. Of
the $233,500 debt issued during the six month period ended June 30, 2010,
$183,500 included detachable warrants. For each dollar, two warrants were
granted with a five-year term and are exercisable at $1.00 per share. The
Company recorded the warrants at their relative fair value and a discount of
approximately $31,000 has been recorded at June 30, 2010.





Subsequent
to June 30, 2010, the Company issued a $50,000 unsecured Convertible Note
convertible into shares of  common stock at 58% of the average market
price during the 10 days preceding the conversion. This note bear interest at
8%.





Other
note payable





In the
three months ended June 30, 2010, the company issued a $35,000 non-interest
bearing unsecured note payable, due on demand, to an existing convertible note
holder.





6.       Income
taxes:





Based
on the U.S. statutory income tax rates, the Company's expected  income
tax benefit was approximately $811,000 and $473,000 for the six months
ended  June 30, 2010 and 2009,  respectively.  The
expected income tax benefit differs from the actual benefit of $0 each period,
due primarily to the valuation allowance.





7.       Shareholders
deficit:





Stock option
plan:





In the
six months ended June 30, 2010, the Company recorded total stock-based
compensation of approximately $925,000 for options that vested during the year,
which is included in general and administrative expense and interest expense. As
of June 30, 2010, the fair value of 600,000 unvested stock options was $67,137
which is expected to be recognized over a weighted average period of
approximately 1 3/4 years.


F-10





The
Company uses the Black-Scholes option pricing model to determine the weighted
average fair value of options. The weighted average fair value of options
granted during the six months ended June 30, 2010 was $0.22 per share. The
assumptions utilized to determine the fair value of options granted during
the six months ended June 30, 2010 and 2009 are provided in the
following table:




June 30,2010
                        
                        
                        June 30,2009Risk
      free interest rates
                        
                        
                        2.38%-2.44%
                        
                        
                        
                        1.34% - 2.75%Expected
      volatility
                        
                        
                        181%-185%
                        
                        
                        
                        135% - 145%Expected
      term in years
                        
                        
                        5
                        
                        
                        
                        2-3Expected
      dividend yield
                        
                        
                        -
                        
                        
                        
                        -




F-11




The
following table sets forth stock option activity since January 1,
2010:




WeightedAverage
                
                
                
                
                
                WeightedNumber of
                
                
                Exercise
                
                
                
                
                
                AverageOptions
                
                
                Price
                
                
                Exercisable
                
                
                Fair ValueOutstanding,
      January 1, 2010
                
                
                5,350,000
                
                
                $
                0.35
                
                
                
                2,050,000
                
                
                $
                0.18Granted/vested
      during period
                
                
                4,350,000
                
                
                $
                0.28
                
                
                
                4,050,000
                
                
                $
                0.22Outstanding,
      June 30, 2010
                
                
                9,700,000
                
                
                $
                0.32
                
                
                
                6,100,000
                
                
                $
                0.21




WeightedNumber of
                        
                        
                        AverageOptions
                        
                        
                        Fair ValueNonvested
      shares atJanuary 1, 2010
                        
                        
                        3,300,000
                        
                        
                        $
                        0.18Granted
                        
                        
                        300,000
                        
                        
                        $
                        0.22Nonvested
      at June 30, 2010
                        
                        
                        3,600,000
                        
                        
                        $
                        0.18




As of
June 30, 2010, the Company has 3,600,000 unvested stock options, of which
vesting on 3,000,000 are contingent on future events.




Options
granted to date have been granted outside of the plan and have terms that do not
exceed five years. There were 6,100,000 vested options as of June 30, 2010.
There was no intrinsic value attributable to outstanding or vested options at
the period ended June 30, 2010.





Common
stock issued for services:





During
the six months ended June 30, 2010, China Wi-Max issued 2,697,500 shares of its
common stock to individuals as employment compensation and payments for services
performed for China Wi-Max, valued at approximately $566,000. This amount
includes 200,000 shares issued to a third party as part of a debt financing
agreement (see subsequent events note 9). During the six month period ended June
30, 2009, the Company issued 2,035,000 shares of common stock to various third
parties who performed development stage services for the Company and for
employee bonuses. These shares were valued at $508,750 ($0.25 per
share).


F-12





8.       Commitments:





Contract
with Gao Da:





In
September  2008, the Company,  through Da
Chuan,  entered into a 20-year contract  with Gao Da, in
which the Company is entitled to utilize Gao Da's licenses and contracts that
relate to the Company's deployment of fiber and wireless assets for the
Company's benefit, as defined. As consideration for the
service  agreement,  the Company is to pay or
reimburse  Gao Da for any licensing  fees for
base  stations  or
license  renewal  expenses,  and the
Company  is to pay a  quarterly  fee to Gao Da
equal to one  percent of net
revenue  generated  from the use of Gao
Da's  contracts and licenses in the
Company's  business  operations,  as  defined.
The Company consolidated Gao Da effective January 1, 2010. All intercompany
transactions have been eliminated.





Leases:





The
Company leases office space in Denver,  Colorado on a month-to-month
basis. For approximately $1,100 per month. Da Chuan leases office space in
Beijing, China on a month-to-month basis for approximately $5,400 per
month.





9.       Subsequent
event disclosure:





On July
23, 2010, the Company entered into a Reserve Equity Financing
Agreement (“REF”) with AGS Capital Group, LLC (“AGS”), pursuant to which AGS
committed to purchase, from time to time over a period of two years, shares
of the Company's common stock for cash consideration up to
$10,000,000, subject to certain conditions and limitations.  In
connection with the REF, the Company also entered into a registration
rights agreement with AGS, dated July 14, 2010. The Company intends to
use the proceeds in connection with acquisitions and joint ventures through our
operating subsidiaries in China, and for general working capital purposes. On
July 23, 2010, 1,653,051 shares of stock were issued to AGS in consideration of
signing the agreement bringing the total of shares issued to AGS to
1,857,051.




F-13


ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





The
following discussion is intended to provide an analysis of China Wi-Max’s
financial condition and should be read in conjunction with China Wi-Max’s
financial statements and the notes thereto set forth herein.  The
matters discussed in these sections that are not historical or current facts
deal with potential future circumstances and developments.  China
Wi-Max actual results could differ materially from the results discussed in the
forward-looking statements.  Factors that could cause or contribute to
such differences include those discussed below.





Plan
of Operations





China
Wi-Max plans to be a telecommunications broadband provider focused on providing
commercial customers with high bandwidth connections through first and second
tier markets in China through subsidiary companies.  Through these
wholly and partially owned subsidiaries, China Wi-Max intends to build, own, and
operate metropolitan area Internet Protocol (IP) based broadband networks, using
both owned optical fiber and licensed Wi-Max capable wireless
spectrum.





China
Wi-Max operating subsidiaries networks are designed to provide the reliability,
redundancy, scalability, and other features expected of a carrier class
network.  China Wi-Max believes its operating subsidiaries can bypass
the local loop facilities of the local exchange carrier to connect enterprise
customers directly to the global communications network.  At this
time, China Wi-Max has six full-time employees in the United States, augmented
by a number of personnel in operating subsidiaries, contract personnel and
professional services organizations.





Service
to customers is provided through direct connections to the optical fiber or
transmissions over licensed radio spectrum provided through China Wi-Max’s
Chinese operating subsidiaries.  Currently, the Company’s operating
subsidiaries are offering customers high speed broadband Internet access in a
pilot program.   Services contemplated to be offered in the
future include Voice-over Internet Protocol, or VoIP, bandwidth on demand,
bandwidth redundancy, virtual private networks, or VPNs, disaster recovery,
bundled data, and video services.





During
2009, the Company continued to put in place the structure and resources
necessary to provide the services contemplated in its business
plan.  The Company put into place the corporate structure of
subsidiaries, licenses and contract relationships necessary to provide services
in China.  Audit work and filings with the United States Securities
and Exchange Commission were successfully completed to position the Company to
become a trading company on the Over The Counter Bulletin Board
exchange.  Initial office space  and personnel resources
were obtained in China.





The
addition of customers will require additional capital to acquire access to new
buildings, purchase and install equipment, etc.  The Company is also
pursuing opportunities to utilize its wireless assets to provide last mile
bridging services for potential customers.  The Company also plans to
initialize its network assets in Hangzhou. This project timing will be dependant
our ability to raise sufficient capital to proceed.  We are optimistic
about the opportunity in China, but recognize how difficult it is to raise
capital necessary to carry out the Company's plans.





In the
continuance of our business operations, we do not intend to purchase or sell any
significant assets and we do not expect a significant change in the number of
employees, until additional capital is raised.


3





RESULTS
OF OPERATIONS





Results
of Operations for the Six Months Ended June 30, 2010 Compared to the Six Months
Ended June 30, 2009





During
the six months ended June 30, 2010 and 2009, China Wi-Max did not recognize any
revenues.





During
the six months ended June 30, 2010, China Wi-Max incurred general and
administrative expenses of approximately $2,127,000 compared to approximately
$1,432,000 for the six months ended June 30, 2009. The $695,000 increase was a
result of an increase in the Company's operational activities compared to the
prior period. During the six months ended June 30, 2010, there was an increase
of approximately $384,000 in salary and wages, expenses for operations in China
decreased by approximately $7,000, consulting and professional fees increased by
approximately $556,000 and travel and other items decreased by approximately
$18,000 over the prior period ended June 30, 2009.





During
the six months ended June 30, 2010, China Wi-Max recognized a net loss of
approximately $2,386,000 compared to a net loss of approximately $1,566,000
during the six months ended June 30, 2009. The $820,000 increase in net loss was
primarily a result of the approximately $695,000 increase in general and
administrative expenses, discussed above combined with the approximately
$125,000 increase in interest expense as a result of the issuance of convertible
promissory notes discussed below.





China
Wi-Max's basic loss per share was $.15 during the six months ended June 30, 2010
versus a net loss of $0.13 per share during the six months ended June 30,
2009.





LIQUIDITY





Historically,
cash flow from operations has not been sufficient to sustain China Wi-Max's
operation without additional sources of capital. At June 30, 2010, the Company
had total current assets of approximately $31,000, consisting of cash of
approximately $300 and prepaid expenses of approximately $30,000. At June 30,
2010, the Company had total current liabilities of approximately $4,899,000.
Total current liabilities consisted of accounts payable of approximately
$656,000, accrued interest of approximately $581,000 and current convertible
notes payable of approximately $3,621,000. At June 30, 2010, the Company had a
working capital deficit of approximately $4,868,000.





During
the six months ended June 30, 2010, China Wi-Max used approximately $262,000 in
its operating activities. The net loss of approximately $2,386,000 was adjusted
for approximately $566,000 of services paid for by the issuance of common stock,
approximately $925,000 in non-cash option expenses and approximately $14,000 in
depreciation and amortization costs. During the six months ended June 30, 2010,
there was an approximate $22,000 decrease in prepaid expenses, an approximate
$299,000 increase in accounts payable, and an approximate $156,000 increase in
accrued interest.





During
the six months ended June 30, 2009, China Wi-Max used approximately $520,000 in
its operating  activities.  The net loss of approximately
$1,566,000  was adjusted for approximately $509,000 of
services  paid for by the issuance of common
stock,  approximately $184,000 in non-cash  stock option
expense and approximately $31,000 in depreciation and amortization expenses.
During the six  months  ended  June
30,  2009,  there was an approximate $15,000
increase  in prepaid expenses, an approximate $183,000 increase in
accounts payable, an approximate $68,000 increase in accrued interest, and an
approximate $20,000 decrease in other assets.


4





During
the six months ended June 30, 2010, China Wi-Max did not have any investing
activities. During the six months ended June 30, 2009, China Wi-Max used
approximately $70,000 in its investing activities for the purchase of property
and equipment.





During
the six months ended June 30, 2010, China Wi-Max received approximately $234,000
from its financing activities. During the six months ended June 30, 2009, China
Wi-Max received approximately $601,000 from its financing
activities.





During
the six months ended June 30, 2010, China Wi-Max issued 2,697,500 shares of its
common stock to individuals as employment compensation and payments for services
performed for China Wi-Max, valued at approximately $566,000. This amount
includes 200,000 shares issued to a third party as part of a debt financing
agreement (see note 7). During the six months ended June 30, 2009, China Wi-Max
issued 2,035,000 shares of its common stock to individuals as employment signing
bonuses and payments for services performed for China Wi-Max, valued at
approximately $508,750.





During
the six months ended June 30, 2010, China Wi-Max issued stock options
exercisable for 4,350,000 shares of its common stock, with an exercise price in
a range from $0.25 to $0.50 per share and a term of 5 years. The options have
variable vesting rates. During the six months ended June 30, 2010, options
exercisable for 4,050,000 shares were vested. These options were valued using
the Black-Scholes model, and the Company has recorded approximately $931,198 of
non-cash stock option expense during the six months ended June 30,
2010.





During
the six months ended June 30,
2009,  China  Wi-Max  issued
stock  options exercisable for 3,150,000 shares of its common
stock,  with an exercise price of $0.25 per share and a term of 3 to 5
years.  The options have  variable  vesting
rates.  During  the six months  ended June
30,  2009,  options  exercisable  for
1,037,000 shares were vested.  These options were valued using the
Black-Scholes model, and the Company has recorded approximately $184,000 of
stock based compensation expense during the six months ended June 30,
2009.





To the
extent China Wi-Max's operation are not sufficient to fund its capital
requirements, China Wi-Max may enter into a revolving loan agreement with
financial institutions or attempt to raise capital through the sale of
additional capital stock or through the issuance of debt. At the present time
China Wi-Max does not have a revolving loan agreement with any financial
institution nor can it provide any assurance that it will be able to enter into
any such agreement in the future or be able to raise funds through the further
issuance of debt or equity.





In the
event that our operating plan changes due to changes in our strategic plans,
lower than expected revenues, unanticipated expenses, increased competition,
unfavorable economic conditions or other unforeseen circumstances, including the
continued turmoil and tightening of the credit markets, and further weakening of
consumer confidence and spending, our liquidity may be negatively impacted. If
so, we could be required to adjust our expenditures for the remainder of 2010
and for 2011 to conserve working capital or raise additional capital, possibly
including debt or equity financing, to fund operations and our growth
strategy.





Need
for Additional Financing





China
Wi-Max's business plan requires funding to develop and expand a new capital
intensive business. China Wi-Max has been addressing funding needs for the next
twelve months estimated at $10 to $15 million dollars to carry out the business
plan. To continue to expand and grow the business beyond twelve months will
require significant additional capital and China Wi-Max expects to be
continually raising funds for at least the next twenty-four months to thirty-six
months. Although management believes there is tremendous upside potential,
failure to raise sufficient additional capital could result in reduced growth,
or in the worst case, failure of the business. These ongoing capital needs are
reflected in the Company's independent registered public accounting firm's Going
Concern comments for the audited period ending December 31, 2009.








5





No
commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.





ITEM
3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





Not
Applicable





ITEM
4T. CONTROLS AND PROCEDURES





Disclosures
Controls and Procedures





We have
adopted and maintain disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) that are designed to ensure that information
required to be disclosed in our reports under the Exchange Act, is recorded,
processed, summarized and reported within the time periods required under the
SEC's rules and forms and that the information is gathered and communicated to
our management, including our Chief Executive Officer (Principal Executive
Officer)and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required
disclosure.





As
required by SEC Rule 15d-15(b), we carried out an evaluation under the
supervision and with the participation of our management, including the Chief
Executive Officer/Chief Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures pursuant to Exchange Act
Rule 15d-14 as of the end of the period covered by this report. Based on the
foregoing evaluation, our Chief Executive Officer/Chief Financial Officer has
concluded that our disclosure controls and procedures are ineffective in timely
alerting him to material information required to be included in our periodic SEC
filings and to ensure that information required to be disclosed in our periodic
SEC filings is accumulated and communicated to our management, including our
Chief Executive Officer/Chief Financial Officer, to allow timely decisions
regarding required disclosure.





Management's
Report on Internal Control over Financial Reporting





This
quarterly report does not include a report of management's assessment regarding
internal control over financial reporting or an attestation report of the
Company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission of newly public
companies.




PART
II. OTHER INFORMATION





ITEM
1. LEGAL PROCEEDINGS





NONE





ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





The
Company made the following unregistered sales of its securities from January 1,
2010 through June 30, 2010.


6




DATE OF SALE
                            
                            TITLE OF SECURITIES
                            
                            NO. OF SHARES
                            
                            CONSIDERATION
                            
                            CLASS OF PURCHASER1/5/2010
                            
                            Common
stock
                            
                            
                            20,000
                            
                            $10,000 Convertible Promissory
      Note
                            
                            Business
      Associate1/15/2010
                            
                            Common
stock
                            
                            
                            80,000
                            
                            $40,000 Convertible Promissory
      Note
                            
                            Business
      Associate2/22/2010
                            
                            Common
stock
                            
                            
                            20,000
                            
                            $10,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/5/2010
                            
                            Common
stock
                            
                            
                            50,000
                            
                            $25,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/8/2010
                            
                            Common
stock
                            
                            
                            12,000
                            
                            $6,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/15/2010
                            
                            Common
stock
                            
                            
                            20,000
                            
                            $10,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/15/2010
                            
                            Common
stock
                            
                            
                            50,000
                            
                            $25,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/15/2010
                            
                            Common
stock
                            
                            
                            20,000
                            
                            $10,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/18/2010
                            
                            Common
stock
                            
                            
                            10,000
                            
                            $5,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/18/2010
                            
                            Common
stock
                            
                            
                            10,000
                            
                            $5,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/18/2010
                            
                            Common
stock
                            
                            
                            30,000
                            
                            $15,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/22/2010
                            
                            Common
stock
                            
                            
                            4,000
                            
                            $2,000 Convertible Promissory
      Note
                            
                            Business
      Associate3/24/2010
                            
                            Common
stock
                            
                            
                            31,000
                            
                            $15,500 Convertible Promissory
      Note
                            
                            Business
      Associate3/24/2010
                            
                            Common
stock
                            
                            
                            40,000
                            
                            $20,000 Convertible Promissory
      Note
                            
                            Business
      Associate4/2/2010
                            
                            Common
stock
                            
                            
                            20,000
                            
                            $10,000 Convertible Promissory
      Note
                            
                            Business
      Associate4/9/2010
                            
                            Common
stock
                            
                            
                            20,000
                            
                            $10,000 Convertible Promissory
      Note
                            
                            Business
      Associate4/9/2010
                            
                            Common
stock
                            
                            
                            10,000
                            
                            $5,000 Convertible Promissory
      Note
                            
                            Business
      Associate4/22/2010
                            
                            Common
stock
                            
                            
                            10,000
                            
                            $5,000 Convertible Promissory
      Note
                            
                            Business
      Associate




DATE
      OF SALE
                
                TITLE OF SECURITIES
                
                NO. OF SHARES
                
                CONSIDERATION
                
                CLASS
      OF PURCHASER3/8/2010
                
                Common
stock
                
                
                1,300,000
                
                Issued for
      services
                
                Business
      Associate3/25/2010
                
                Common
stock
                
                
                15,000
                
                Issued for
      services
                
                Business
      Associate3/25/2010
                
                Common
stock
                
                
                200,000
                
                Issued for
      services
                
                Business
      Associate3/25/2010
                
                Common
stock
                
                
                5,000
                
                Issued for
      services
                
                Business
      Associate3/25/2010
                
                Common
stock
                
                
                5,000
                
                Issued for
      services
                
                Business
      Associate3/25/2010
                
                Common
stock
                
                
                15,000
                
                Issued for
      services
                
                Business
      Associate5/6/2010
                
                Common
stock
                
                
                30,000
                
                Issued for
      services
                
                Business
      Associate5/6/2010
                
                Common
stock
                
                
                30,000
                
                Issued for
      services
                
                Business
      Associate5/6/2010
                
                Common
stock
                
                
                26,250
                
                Issued for
      services
                
                Business
      Associate5/6/2010
                
                Common
stock
                
                
                26,250
                
                Issued for
      services
                
                Business
      Associate6/22/2010
                
                Common
stock
                
                
                200,000
                
                Issued as part of a Reserve Equity
      Financing Agreement
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                20,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                50,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                20,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                100,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                40,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                300,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                20,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                5,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                30,000
                
                Issued for
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                170,000
                
                Issued for consulting
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                10,000
                
                Issued as an
      incentive
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                75,000
                
                Issued for consulting
      services
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                300,000
                
                Issued as
      reimbursement
                
                Business
      Associate6/30/2010
                
                Common
stock
                
                
                5,000
                
                Issued as an
      incentive
                
                Business
      Associate




7





Exemption
From Registration Claimed





All of
the sales by the Company of its unregistered securities were made by the Company
in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the
"1933 Act"). All of the individuals and/or entities listed above that purchased
the unregistered securities were almost all existing shareholders, all known to
the Company and its management, through pre-existing business relationships, as
long standing business associates. All purchasers were provided access to all
material information, which they requested, and all information necessary to
verify such information and were afforded access to management of the Company in
connection with their purchases. All purchasers of the unregistered securities
acquired such securities for investment and not with a view toward distribution,
acknowledging such intent to the Company. All certificates or agreements
representing such securities that were issued contained restrictive legends,
prohibiting further transfer of the certificates or agreements representing such
securities, without such securities either being first registered or otherwise
exempt from registration in any further resale or disposition.





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





None.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.


ITEM
5. OTHER INFORMATION





None.


ITEM
6. EXHIBITS





Exhibits.
The following is a complete list of exhibits filed as part of this Form 10-Q.
Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of
Regulation S-K.





Exhibit
31.1  Certification of Chief Executive  Officer pursuant to
Section 302 of the Sarbanes-Oxley Act





Exhibit
31.2  Certification of Chief Financial  Officer pursuant to
Section 302 of the Sarbanes-Oxley Act





Exhibit
32.1  Certification of Chief Executive  Officer pursuant to
Section 906 of the Sarbanes-Oxley Act





Exhibit
32.2  Certification of Chief Financial  Officer pursuant to
Section 906 of the Sarbanes-Oxley Act




8




SIGNATURES





Pursuant
to the requirements of Section 12 of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.





CHINA
      WI-MAX COMMUNICATIONS, INC.(Registrant)Dated: December
      7, 2010
                By:
                /s/ Steve T. BermanSteven
      BermanPresidentDated: December
      7, 2010
                By:
                /s/ Frank VenturaFrank
      Ventura,Chief
      Financial Officer




9